Under the Tax Cuts and Jobs Act, 0.11 percent of farm estates would have owed estate taxes in 2016

A chart showing estimated share of farm estates required to file a tax return and that owed estate taxes under TCJA and previous tax law in 2016

The Tax Cuts and Jobs Act (TCJA), passed in December 2017, doubled the Federal estate tax exemption amount to $11.18 million per individual. The estate tax exemption amount has increased significantly since 2000, when the exemption was $675,000, resulting in fewer farm estates that must file a tax return and that owe estate taxes. ERS researchers estimated that 39,214 farm estates were created in 2016 and, had the TCJA been in effect in 2016, only 0.58 percent of these farm estates would have been required to file an estate tax return. After accounting for adjustments, deductions, and expenses, 0.11 percent would have owed estate taxes, with an aggregate estate tax liability estimated at $104 million. By comparison, ERS estimated that under the previous law, 2.05 percent of farm estates were required to file an estate tax return in 2016 and that 0.86 percent owed estate taxes. The aggregate liability was estimated at $496 million. This chart uses data found in the June 2018 ERS report, Estimated Effects of the Tax Cuts and Jobs Act on Farms and Farm Households.

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